Google has set aside $200 million, or 12.5 percent of the shares issued to pay for YouTube, to cover "certain indemnification obligations" that may hit the video sharing site. The big question: Will that be enough? These obligations, also known as copyright lawsuits, mean a healthy chunk of the equity Google used to pay for YouTube will be held in escrow for a year.

The message: Google is a little more worried about lawsuits than it initially disclosed. Lawyers, rev your engines.

Despite Google's deals with CBS, Sony BMG and Warner Music Group, the big guys are the least of Google's worries. Google is going to be swarmed by a bunch of gnats looking for payouts--especially since Google has posted a "$200 million, Come and Get It" sign when it closed the YouTube deal.

Should Google be worried? You bet. After all, some of those gnats are pretty big. Howard Stern has said at least three times on his Sirius Satellite Radio show that Google's purchase of YouTube makes him more likely to send off a cease or desist letter or two. When YouTube was young and broke it wasn't worth Howard's time. The market cap of YouTube's new parent changes that. Do you pay Howard or deal with the bad press? It's not like Howard doesn't have a point. See here. All of those clips are from Howard's on-demand TV channel. Howard's sidekick Artie Lange has his whole career posted on YouTube.

Sure, you can argue it's good promotion, but what happens when every artist wants some change. Google's best option is to pay the dough. Again, it's a question of how much dough Google has to pay out. On the bright side, Google could issue shares and broaden its shareholder base.

This potential invasion of the copyright gnats isn't an issue today, but could become one quickly. As Mark Cuban notes the next year is going to be interesting. For now, Wall Street doesn't seem too concerned.

The YouTube acquisition is certainly not without its own risks. The most significant issue facing Google following this acquisition is the potential for a deluge of litigation concerning copyrighted content on YouTube. A protracted legal battle in the courts could result in millions of dollars of legal expenses and settlement outside the courts is also a possibility. The worst case scenario can be seen in the fates of companies like Napster and MP3.com. Our analysis of the top 100 most viewed videos so far in November indicate that under 35% of these videos (by total views and number of videos) potentially contain contentious copyrighted material. This means that the majority of videos on the site are truly user-generated content. As a result, we believe the impact of Google/YouTube removing copyrighted content may be less than feared. However, it is unclear how much of YouTube’s traffic comes to site primarily for copyrighted content rather than user-generated videos.

Terry's bet: The monetization of YouTube will outrun the copyright gnats. His price target for Google: $600.